How Manufacturing Process R&D May Save $

I was recently talking with the company’s treasurer about the challenges facing OEMs in regards to meeting the 54.5 mpg CAFE requirement by 2025 and the various lightweighting and alternative powertrain technologies that are being developed and deployed.

Blog: 8/18/2014

Gary S. Vasilash

Editor-in-Chief, Gardner Business Media, Inc.

I was recently talking with the company’s treasurer about the challenges facing OEMs in regards to meeting the 54.5 mpg CAFE requirement by 2025 and the various lightweighting and alternative powertrain technologies that are being developed and deployed.

And being the good money steward he is, he brought to my attention an item from a CPA and advisory firm, Battelle Rippe Kingston on R&D credits that manufacturers may be able to get from local, state or the federal government.

According to the firm, “R&D” isn’t simply about researching and developing things (e.g., batteries or new materials), but actually manufacturing operations.

Battelle Rippe and Kingston write:

“Examples of automotive initiatives that may be eligible for R&D tax incentives include:

Manufacturing trials to resolve technical challenges with scaling up new products to full-scale production

Prototype testing of vehicles and components resulting in a new or improved product

Improvements in structural performance or crash worthiness”

All of which is to say that the road to 2025, while it won’t be smooth and will involve, undoubtedly, many detours along the way, can conceivably somewhat less expensive than might have otherwise been thought, at least vis-à-vis taxes.